Further Business Support Announced
In a brief announcement to Parliament earlier today, Chancellor Rishi Sunak has made a further announcement of support for businesses as a result of the surge in Coronavirus cases and Lockdown 2.0 in England.
These are as follows:
The Furlough Scheme
The Coronovirus Job Retention Scheme (CJRS), also known as the Furlough Scheme, has been extended until March 2021.
As announced at the weekend, the scheme will revert to a higher level of support than employers were benefitting from most recently.
- The Government will pay the unworked wages of qualifying employees to 80% of their usual salary level, up to a maximum of £2,500 per month.
- Employers will only contribute Employers National Insurance Contributions and pension contributions.
This level of support will remain in place until a review in January 2021, after which employers may be asked to contribute at a higher level. This will depend on the economic conditions at that point.
The extension to the Furlough scheme applies to all countries within the UK.
Early reports have indicated that if an employee was made redundant after 23rd September 2020 they can be brought back on to the Furlough Scheme and recommence employment. We have not seen confirmation of this as yet, and would recommend speaking to your HR advisor should you wish to consider bringing back employees under these circumstances.
As a reminder, the key criteria of the scheme are as follows:
- Businesses will be able to claim in advance of making payments to employees if they choose to do so. Claims can be made from 8am on Wednesday 11th November. Claims for November must be made by 14th December 2020, with each subsequent month being claimed by the 14th of the following month.
- Flexible furloughing, as well as full time furloughing of staff is possible.
- Employees must have been included on an RTI submission to HMRC prior to midnight on the 30th October 2020 to qualify for the scheme. They can be on any type of contract. As before, the amended working arrangements must be agreed between employer and employer. Claims will need to be for a minimum period of seven days. Employers can top-up employee’s salary beyond the 80% if they choose to do so.
Self Employed Income Support Scheme (SEISS)
The level of the third grant under the above scheme was increased in the weekend’s announcement. It was announced as being increased to 80% for November, with the average for the three month period of the grant rising to 55% of average trading profits.
The grant payable for November 2020 to January 2021 has today been increased to 80% for the three month period to which it applies. As reported previously, claims can be made from 30th November, and we expect the process of claiming to be the same as the earlier two grants.
The total amount of the third grant is capped at £7,500 for the three months to January 2021.
No announcement has yet been made around the level to expect for the fourth grant, due in February 2021.
The Job Retention Bonus
The purpose of the Job Retention Bonus was to encourage employers to retain previously furloughed workers for three months beyond the end of the Furlough Scheme. As the Furlough scheme has been extended, the Job Retention Bonus will be deferred until a later date.
These remain unchanged from the details announced earlier, as follows:
These will be available for businesses in England that are forced to close either by local or national restrictions. Different rules will apply in the Devolved constituencies.
Grants are calculated for each 2 week period you remain closed, and are based on rateable value as follows:
- up to £15,000 the grant is £667 every 2 weeks
- between £15,001 and £50,999 £1,000 every 2 weeks
- above £51,000 should receive a grant of £1,500 every 2 weeks
Local Authority Grants
Local Authorities have been allocated £1.1billion to support businesses in their areas. This money can be used at their discretion. We would recommend researching your local authority to see if there are any local schemes you may be able to benefit from.
The Job Support Scheme
Announced as the ‘follow-on’ scheme to the Furlough Scheme, and due to have started on the 1st November, this has been deferred.
Once again, there are changes to review and consider for the impact they may make to your business. Along with the start of Lockdown 2.0 in England, it’s been a hectic week for all small business owners.
If you’d like to discuss any of the recent changes in support, legislation or business conditions, please get in touch. We’re here to help!